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Go local to find best emerging market deals, urges Neuberger Berman

By: Jonathan Boyd | 23 May 2011

Conrad Saldanha, portfolio manager for emerging market equities at Neuberger Berman, says in his latest report that the best investment deals are to be found among local companies drawing from the growth in middle class earnings and consumption.

With the number of middle-class consumers, defined as those with disposable income between $5,000-$15,000 doubling in the past decade in countries such as China, India and Brazil, the share of global consumption accounted for by people in these and other emerging markets has soared.

This means that companies closest to this growing consumption base are best placed to benefit. For example, those in the Consumer Staples, Financials, Industrials, Telecommunications, Utilities, and Health Care sectors, according to Saldanha.

There are some variations to consider. Much more of China’s economy is driven by state spending rather than private consumption, relative to other markets such as Indonesia. However, the overall picture is that at currenty prices, stocks in local companies are set to deliver continued growing returns to investors at acceptable levels of risk.

Click here to read the full report on [asset_library_tag 2963,Investing in Emerging Markets].